Business news 12 September 2024
GDP figures reaction. Revised rate reaction. OECD revises growth forecast. Reeves warning, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
GDP figures reaction
As shown in yesterday’s blog, data from the Office for National Statistics (ONS) shows that the economy remained flat for the second consecutive month in July. GDP remained unchanged, despite City analysts predicting growth of 0.2%. While there was growth in the services sector, manufacturing output and construction was down. The ONS data shows that the economy grew by 0.5% in the three months to July. The economy grew by 0.7% in Q1, followed by a 0.6% increase in Q2.
Sanjay Raja, an economist at Deutsche Bank Research, said July’s figures were “disappointing,” adding that the UK saw “broad-based weakness across the economy.”
Barret Kupelian, chief economist at PwC, commented: “Growth was widespread across the services sector … but was offset by poor performance in the manufacturing and construction sectors.”
Commenting on the ONS report, Chancellor Rachel Reeves said: “I am under no illusion about the scale of the challenge we face and I will be honest with the British people that change will not happen overnight.” She added that the Government is taking “long-term decisions now to fix the foundations of our economy.” Ms Reeves told the BBC that the upcoming Budget will involve “difficult decisions” on tax, spending and welfare.
Economists expect rates to be held until November
Economists polled by Reuters expect the Bank of England to hold interest rates at 5% this month before reducing the base rate in November, despite the fact inflation is forecast to stay above the Bank’s 2% target. All 65 economists predicted that the base rate will be left at 5% next week. Almost 80% expect one more cut this year, with 48 predicting it will come in November and one saying December. The other 16 saw two more rate cuts this year. Sanjay Raja, chief UK economist at Deutsche Bank, said: “Having multiple data points to really assess how fast and how speedy the disinflation narrative is building in the UK, that’s something we don’t think we will get until the November decision.”
OECD revises growth forecast
The Organisation for Economic Co-operation and Development (OECD) has revised up its growth forecasts for the economy, saying that it expects UK GDP to grow by 1.1% this year and by 1.2% in 2025. This marks an increase on the 0.4% for 2024 and the 1% for 2025 that it predicted in May. The OECD also warned that the UK “faces a challenging economic environment of high interest rates and low growth limiting macroeconomic policy options.” It suggested that Chancellor Rachel Reeves will need to consider tax reform – as well as increases – in the Budget.
Reeves given growth warning
With official data showing that economic growth flatlined in July, Chancellor Rachel Reeves has been warned that expected tax rises in October’s Budget could damage growth. While Simon Pittaway, senior economist at the Resolution Foundation, said: “After a strong start to the year, growth came to a halt in June and July, driven by falls in production and construction,“ Suren Thiru, economics director for the ICAEW, warned that growth could slow further in the coming months with “higher energy bills and expected tax rises likely to trigger renewed restraint in spending and investment.”
Government agrees £500m funding deal with Tata Steel
Business Secretary Jonathan Reynolds has confirmed that the Government will invest £500m into Tata Steel’s UK operations, while a “new and improved deal” for workers will support the transition to greener steel production. Mr Reynolds added that workers at the Port Talbot steel plant will receive improved redundancy terms and the offer of a skills package. Unions are balloting members on plans that will see minimum voluntary redundancy payouts of £15,000 for full-time employees, alongside a £5,000 retention payment. Tata will offer staff at risk of compulsory redundancy a “comprehensive training programme” providing “recognised qualifications in sought-after skills.”
Markets
Yesterday, the FTSE 100 closed down 0.15% at 8193.94 and the Euro Stoxx 50 closed up 0.34% at 4763.58.
In the UK, Rentokil led the decline after issuing a profit warning, causing its shares to plummet by over 20%. Conversely, WH Smiths saw its stock jump more than 10%, buoyed by stronger-than-expected earnings from its travel division.
Overnight in the US the S&P 500 rose 1.07% to 5554.13 and the NASDAQ rose 2.17% to 17395.53 following the release of the US inflation data (see below).
This morning on currencies, the pound is currently worth $1.306 and €1.185. On Commodities, Oil (Brent) is at $71.85 & Gold is at $2520. On the stock markets, the FTSE 100 is currently up 0.9% at 8267 and the Eurostoxx 50 is up 1.4% at 4830.
US inflation
US Inflation in August declined to its lowest level since February 2021 (2.5% compared to 2.9% in July) , according to a Labor Department report Wednesday that sets the stage for an expected quarter percentage point rate cut from the Federal Reserve in a week. The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus, the Bureau of Labor Statistics reported.
ECB
The European Central Bank is widely expected to deliver a quarter-point rate cut on Thursday, a move that would mark its second reduction to the deposit rate this year following a landmark cut in June.
House Prices
UK House Prices are showing signs of increasing for the first time in nearly two years as market activity picks up, according to surveyors. Price growth moved into positive territory last month for the first time since October 2022, the Royal Institution of Chartered Surveyors (Rics) said. A net balance of 1% of professionals reported prices rising rather than falling in August – and a balance of 14% expect a steady increase over the next three months.
Heathrow
Heathrow Airport reported a fourth consecutive monthly passenger record in August with 7.97 million people used the airport last month.
OpenAI
It is reported that OpenAI is working on raising $6.5bn at a valuation of the business at $150bn from investors such as Apple and Microsoft. The company behind ChatGPT is currently valued at $86bn and is raising funds to improve its AI models and see off growing competition.
Nvidia
Nvidia soared more than 8%, adding $216 billion in market cap, as CEO Jensen Huang highlighted limited supply and strong demand for its latest generation of chips, called Blackwell.
AWS to invest £8bn in UK data centres
Amazon Web Services (AWS) is planning to invest £8bn to build, maintain and operate data centres in the UK. The firm says the move will contribute £14bn to UK GDP through to 2028 and support an average of over 14,000 full-time equivalent jobs every year at local businesses. Phil Le-Brun, director of enterprise strategy at AWS, said the move is part of a “long standing” commitment to support growth and productivity, adding that it creates a “really interesting opportunity” for SMEs. He said that if half of the SMEs that are not “digital leaders” adopt technology such as cloud computing and AI, “this could create an estimated £38bn in additional value for the UK economy over the next five years, spread across the entire UK.”
Kier
Kier reported annual earnings growth and announced a new long-term plan to drive further progress. Revenue in the year to June 30 totalled £3.91 billion, a rise of 16% from £3.38 billion. Pretax profit increased 31% to £68.1 million from £51.9 million.
Fevertree
Fevertree Drinks reported a profit rebound in the first half of the year as its market share continued to bubble up in the US, though overall sales were flat. The maker of premium mixers declared a 2% increase in its interim dividend to 5.85p per share as it declared a “strong start” has been made to the second half where it is optimistic about accelerating growth.
UniCredit & Commerzbank
UniCredit Chief Executive Officer Andrea Orcel said that a full takeover of Commerzbank is an option after announcing that it had acquired a 9% stake, a move that has jolted European banking.
IFS urges Chancellor to target tax-free lump sum
The Institute for Fiscal Studies (IFS) has urged Rachel Reeves to reduce the amount that pensioners can withdraw from their pension pots tax-free. With the Chancellor said to be considering a shake-up of pension tax reliefs in the Budget, the IFS said there is a “strong case for reform,” highlighting that the system offers generous tax breaks to those with the biggest pensions. While the IFS suggested that changes could be made, it cautioned that any reform “needs to be carefully thought through.” It has also suggested that pension pots should be subject to inheritance tax. It went on to advise Ms Reeves against setting a flat rate of tax relief for pension contributions, arguing that this would be “damaging, complex and inequitable.” Sir Steve Webb, a former Pensions Minister, said there was “no doubt that the cost of pension tax relief will be under close scrutiny behind closed doors at the Treasury.”
Latest Insolvencies
Appointment of Liquidators – STEVE KERSHAW LIMITED
Appointment of Liquidators – CARDINAL INHEALTH LTD
Appointment of Liquidators – THE OXFORD ADVISORY PARTNERSHIP LIMITED
Appointment of Liquidators – AARON SURVEYORS LTD
Appointment of Liquidators – RETURN MARKETING LIMITED
Appointment of Liquidators – MEDIHOME LIMITED
Appointment of Liquidators – CASTLE VIEW COMMUNITY AND FITNESS CENTRE LIMITED
Appointment of Liquidators – AEK CONSULTING LIMITED
Appointment of Liquidators – JKP MEDICAL LTD
Appointment of Liquidators – JMOLLOY FIRE ENGINEERING LTD
Appointment of Liquidators – COURTHOUSE MEDICAL LTD
Appointment of Liquidators – ATHELSTAN CONSULTING LIMITED
Appointment of Liquidators – SECURE PROGRAMMES LIMITED
Appointment of Liquidators – N & S ELECTRICAL LTD
Appointment of Liquidators – ALBERT STREET CAPITAL LTD
Appointment of Liquidators – LIVE BETTER WITH LTD.
Appointment of Liquidators – DR PAUL JACKSON LTD
Appointment of Administrator – PYROCORE LIMITED
Appointment of Liquidators – WILLOWS CONVEYANCING SERVICES LIMITED
Petitions to wind up (Companies) – JUKES CONSTRUCTION LTD
Appointment of Liquidators – RUBIDIUM SOLUTIONS LIMITED
Appointment of Liquidators – DMJ DIGITAL SERVICES LIMITED
Appointment of Liquidators – ZOE & CHLOE LIMITED
Appointment of Liquidators – AON TRUST CORPORATION LIMITED
Appointment of Liquidators – SIMON DRISCOLL LIMITED
Appointment of Liquidators – CHRONOS DATA LIMITED
Appointment of Liquidators – PRESTIGE DIGITAL LIMITED
Petitions to wind up (Companies) – KRK LIMITED
Appointment of Liquidators – CERTUS SAFETY LTD
Appointment of Liquidators – SPORADES CAPITAL LIMITED
Appointment of Liquidators – D3 PHARMA LIMITED
Appointment of Liquidators – INNOTIVE LTD
Petitions to wind up (Companies) – GLENEVIN LTD
Appointment of Liquidators – SANLAM PARTNERSHIPS LIMITED
Appointment of Liquidators – TIN FISH CREATIVE COMMUNICATIONS LIMITED
Appointment of Liquidators – FLAT IRON (UK) LIMITED
Petitions to wind up (Companies) – RUBYDOOGIFTS LTD
Appointment of Liquidators – PRINCETON ENGINEERING CONSULTANT LIMITED
Appointment of Liquidators – ELYO FALCON LIMITED
Petitions to wind up (Companies) – EUROPEAN APPAREL LTD
Appointment of Liquidators – DANCEPOOL LIMITED
Appointment of Liquidators – DR CONSULTANCY LTD
Appointment of Liquidators – HALEHOLD LIMITED
Appointment of Liquidators – JACK EVANS(HARDWARE & IRONMONGERS)LIMITED
Petitions to wind up (Companies) – TANNER LEISURE LTD
Appointment of Liquidators – SHORESIDE PROPERTIES LIMITED
Petitions to wind up (Companies) – WORLD DEPOT INC LTD
Appointment of Liquidators – CONSULTING AND INTERIM MANAGEMENT LTD
Appointment of Liquidators – EXSIT ENGINEERING LIMITED
Petitions to wind up (Companies) – RUBYDOOCAKES LTD
Petitions to wind up (Companies) – GERRY`S OFFSHORE INCORPORATIONS LIMITED
Appointment of Liquidators – DG-INFOSEC-CONSULTING LIMITED
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.